Govt may amend pension fund bill

The government is considering amendments to Pension Fund Regulatory and Development Authority Bill, based on recommendations of parliamentary standing committee, Minister of State for Finance P K Bansal said.

The committee had recommended that foreign direct investment in pension sector should be the same as insurance.

Bansal, however, did not give details of the amendments being considered. India, which currently allows 26 per cent FDI in insurance sector, is planning to raise the FDI limit in the sector to 49 per cent.

The pension fund regulator bill, which was introduced in Lok Sabha in 2005, is silent on FDI. The central government had shifted to a new defined contribution pension system for employees who joined after January 1, 2004, from the previous defined benefit scheme.

The new pension scheme currently covers over 75,000 new employees of the central government. In addition, 12 state governments have also decided to implement the scheme.

The pension contribution of central government employees, who joined after January 1, 2004, is currently parked in the Public Accounts of India as the pension regulator bill has not been passed.

The government has announced that it will allow six pension funds, including one public sector fund manager.

Earlier, P Chidambaram said there was a good chance of pension fund regulator bill being passed in the budget session of parliament. The budget session will end on May 23.

Chidambaram had also said there was there was a broad consensus on pension reforms. The Left parties, key allies of the government, are vehemently opposed to opening up the pension sector for private investment.

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